Shanghai has introduced further incentives for electric car purchases to sweeten deals already subsidized by the central government reports the Shanghai Daily.

To encourage individuals to buy new-energy cars before the end of next year, the municipal government will pay a subsidy of 40,000 yuan (US$6,415) for electric vehicles and 30,000 yuan for plug-in hybrids. Each type of vehicle will also get a free license plate.

It is not yet clear whether there will be a quota for such car plates or how big it could be. Previous media reports citing insiders said 20,000 plates for energy-saving cars would be granted in the first batch.

But the announcement specified for the first time that the subsidy will be given directly to car manufacturers, who will then reduce the retail price of a new energy car by the same amount.

Adding in the maximum 60,000 yuan offered by the central government, people who buy new-energy cars in Shanghai can save nearly 170,000 yuan in total as they don't need to bid for a license plate for normal cars, whose average auction prices have soared 35 percent this year to nearly 70,000 yuan this month.

The incentives, coupled with the saving in fuel costs, could make a huge dent in the cost of a new-energy vehicle.

The Roewe E50, which was launched last month at 234,900 yuan, is China's first self-developed and mass-produced purely electric car, manufactured by Shanghai-based maker SAIC Motor Passenger Vehicle Co Ltd.

Carmakers are to get a 300 yuan subsidy for recycling each set of electric car batteries, according to the announcement.

Besides the incentives for manufacturers and buyers, the municipal government is also trying to entice more companies to develop electric vehicles.

Legal entities in Shanghai who persuade more than 10 employees to buy cars at any one time are eligible for a 2,000 yuan subsidy for each car to be used to improve facilities for electric car owners, such as building charging facilities.

Since Shanghai was named the country's first pilot city for electric vehicle development in April last year at the inauguration of its Electric Vehicle International Demonstration Zone in Jiading District, many consumers have become switched on to the idea of green mobility through the use of electric vehicles in the area.

But the city still faces an uphill journey marketing electric vehicles as there are not enough test-drive opportunities or support facilities, Shanghai International Automobile City (Group) Co found in a survey carried out earlier this year.

More than 64.9 percent of respondents have heard about electric vehicles, but only 9 percent have driven one. Charging facilities are scarce outside the demonstration zone, but up to 72.1 percent of potential electric car buyers surveyed wanted to be able charge their cars at their workplace and shopping centers.